at-the-money

Here we will look at two options strategies that will allow a trader to take a bullish or bearish view on the market with a clearly defined risk vs. reward ratio and a price target calculated using options prices.

With Bernanke assuring markets that the Fed will not exit before the economy grows stronger and pledging further support should things get worse, it seems like for now the path of least resistance for markets is up.

Suppose Apple or some other big stock is going into earnings. You want to take a directional shot, but you don’t want to commit the large amount of capital that is required either for a stock purchase or as margin for a short sale.